For decades, cash has been the primary tool used by people to pay for items in Europe. The use of paper currency, as well as coins, is set to continue in the continent, but the increase in electronic payments could well disrupt the norm. Currently, the rise in the use of credit cards, cryptocurrencies, and other contactless payments have given rise to rumors that cash could be well on its way out. Even so, money is still considered king in Europe and may take a while before it is phased out as a mode of payment.
The debate on cash becoming obsolete has been ongoing for many years with a majority of people seeing the entry of other forms of payments as a great addition rather than a replacement of coins and notes as legal tender. Even so, there are people that believe a cashless economy is the future of Europe if it is to remain a powerhouse globally. Some of the signs that point to the end of cash transactions in Europe include:
- A rapid rise in electronic payment systems
Although making payments can be done in a variety of ways, most people in Europe prefer using credit or debit cards. These cards are easily accessible and provided by reputable financial institutions operating within Europe and other international countries. Furthermore, individuals can get the best rates after reading through best credit card processing reviews and decide which one to have in their wallets. Additionally, electronic payment systems are very convenient for those that make payments to merchants abroad as they can receive them instantaneously. In reality, cashless payments travel much faster than notes and coins.
- Reduction in staff within banks and financial institutions
The introduction of technology in the banking sector has seen the automation of many of its activities resulting in the hiring of less staff. As less cash is handled in these institutions, the need for employing tellers is on the downward trend, and the embracing of digital payments is on the rise. Additionally, the fewer people managing the transactions in the banks is for the benefit of the bank and the financial industry as a whole. In some European countries, ATMs are fully automated allowing users to deposit and withdraw cash without help from a human being.
- Integration of cashless systems in the fight against criminal activities
The association of cash with major illegal activities such as drug trafficking has resulted in security personnel considering the implementation of cashless systems. Most criminals use cash to transact business because of its invisible nature, allowing it to pass from one hand to another without being noticed. However, with electronic payments, such payments will be tracked and even intercepted before they take place. Besides, carrying of large amounts of cash is becoming dangerous with targets losing money that cannot be recovered. However, the use of credit or debit cards makes it possible to limit further use of the money in the card, and money can be retrieved with a single call to the bank.
Countries in Europe that are almost cash-free
As the debate for or against cash rages on, some countries in Europe are prepared to let go of using notes and coins in their daily transactions. These countries have gradually let go of using cash in a majority of their purchases and are likely to be utterly cash-free in the next decade or so. Some of these countries include:
The Netherlands has taken the lead in cashless systems with almost ninety percent of its population using debit cards to pay for items. The retailers that prefer electronic payments believe that the direction the country is taking will result in a cleaner or even safer Sweden in the coming years. Young people have fully embraced the move with many of them using electronic payments for the majority of their transactions. Aside from retail goods, big-ticket items such as rent and other utility bills are paid without using paper money. Majority of the vendors and retailers in the Netherlands also decry the high cost of handling cash and security, making them consider a cashless society as the best way to run their businesses safely.
Up to ninety-nine percent of the population in Sweden use digital payments in their day to day transactions. The country has been a leader in the elimination of cash as a mode of payment with most of its people embracing the use of cashless systems. One of the most significant innovations in the European country has been Swish, a mobile application that enables users to transfer money between banks. Apart from payments by individuals, banks in the country have also become cashless with the biggest ones maintaining only five percent of their branches that deal in cash.
Although the UK has not fully embraced a cashless system, there have been consultations within the UK government to get rid of some coins used in the country. The main reason for the consideration is that the coins are no longer efficient and making the coins is no longer cost-effective. Some of the monies that were under discussion are 1p, 2p and £50 primarily used in the UK. For some, the elimination of these currencies may be seen as the beginning stages of the government and society embracing a system where coins and notes will no longer be exchanged in the country.
Ultimately, stopping the use of cash in Europe is going to take longer in some countries more than others. Countries that are willing to be cash free have started the journey towards their goal, and their citizens have embraced the strategy as a whole. Nevertheless, those that are still struggling to be cash-free need to overcome cultural mindsets towards cash as a mode of payment and the benefits to the citizens before making the final decision. All in all, it looks like in Europe, solid money is here to stay until the disruption is accepted by all.
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